Zoltan Pozsar Sees a World Of Problems That Money Can’t Solve

If you think back to the European debt crisis from a decade ago, there was a pretty simple solution to the crunch in the end: Money.

When Mario Draghi gave his famous “whatever it takes” speech -- implicitly promising to backstop peripheral debt with the European Central Bank’s unlimited balance sheet -- the crisis entered its final chapter. Of course the politics were messy, and that’s why it went on for multiple years.

But fundamentally the solution was pretty simple and straightforward. It was money — and lots of it.

Today Europe finds itself in an almost mirror-image predicament. This time the focus is less on the periphery, and more on Germany’s huge Russian gas bill. And the crucial difference is that no amount of money can easily solve the problem. There’s no way to restructure the country’s energy portfolio overnight. It’s a huge engineering challenge. There’s no monetary solution to a problem that’s fundamentally molecular.